OMF NZ Dairy Futures report – January 23, 2014

Milk corrects – buy the dip  We saw a correction in Class III and Class IV overnight in the U.S.; no surprise given its run so far this year.  Our view this is just a breather and a correction we have to have.  We would be buying any dips (excuse the pun) mainly because of two major fundamentals – the impending drought in California and growing Asian demand. Saputo wins! Congratulations to Saputo for achieving a majority stake in Warrnambool Cheese.  It was not a battle we thought they would win but they are incredibly well resourced and they have won the day.  We see this as a canary in the coal mine moment; why is a Canadian operation spending big bucks to get into Australia?  One word – Asia!